Withdrawal of the two-tier code

One of the earliest acts of the coalition government was to scrap the “two tier code”. The central government-level code (the Code of Practice in workforce matters in public sector service contracts) was withdrawn in December 2010, while the equivalent local government code (the Code of practice on workforce matters in local authority service contracts) was abolished in March 2011.

The purpose of these Codes, introduced in 2003 following extensive union campaigning, was to prevent a two tier workforce developing with the outsourcing of public services to the private sector. Public sector employees transferring into the private sector are protected by TUPE, but TUPE does not apply to new joiners. The Codes aimed to deter employers taking on new recruits on less favourable terms, undermining collectively agreed pay and conditions, weakening union organisation and creating a demoralised workforce, in which some receive better wages than others for the same job.

The central government Code was replaced by a set of six “principles of good employment practice for government, contracting authorities and suppliers” (available to download from the website of the Cabinet Office). The new “Principles” pave the way for a two tier workforce, with new entrants taken on to work alongside former public sector workers, at lower rates and worse conditions. The third principle states: “Where a supplier employs new entrants that sit alongside former public sector workers, new entrants should have fair and reasonable pay, terms and conditions. Suppliers should consult with their recognised trade unions on the terms and conditions to be offered to new entrants.”